New FCC Rules Target Port-Out Fraud & SIM Swapping

More anti-fraud requirements will soon hit the telecommunications industry as the Federal Communications Communication (FCC) adopts measures to address two growing fraud schemes – port-out fraud and SIM swapping. 

The new Report and Order, effective Jan. 8^th, 2024, requires wireless providers to adopt secure customer authentication methods before redirecting a phone number to a new device or carrier. It also mandates that providers notify customers whenever a SIM change or port request is made on customers’ accounts. 

The new rules are the latest in a series of regulatory measures in the United States and around the world to crack down on fraud by tightening security requirements for telecom providers. In March of 2023, the FCC took aim at illegal robotexting by ordering wireless carriers to implement heightened number verification processes, while in May, Ofcom, the United Kingdom communications regulator, announced stricter rules around Calling Line Identification (CLI) data. In 2021, the FCC’s STIR/SHAKEN regulations kicked off the growing contingent of anti-fraud measures by requiring voice service providers to attest the CLI and file robocall mitigation plans.

As regulatory bodies continue to promote new fraud prevention measures, netnumber is doing its part by developing novel services to circumvent bad actors and better protect our customers, partners and the industry as a whole while meeting stringent mandates in the U.S. and worldwide. In particular, our recently launched NumeriCheck solution offers an innovative answer to fraud through real-time number verification and validation (more on that later). But first, some background. 

A Little History on Number Portability

In today's world, consumers take for granted the ability to easily switch phone service between carriers while retaining their existing phone numbers. Known as number portability, this practice is now common in numerous countries worldwide, although it wasn’t always the case.

The concept of number portability came on the scene in the late 1980s to early 1990s as mobile phones were emerging. Prior to this, phone numbers were tied to a specific landline or mobile carrier, making it difficult for consumers to switch providers without having to change their phone numbers. This lack of portability was a major barrier to competition and innovation across the telecom industry.

During this era, a few countries began experimenting with number portability, and its adoption quickly caught on. Its use has grown by leaps and bounds over the last three decades, and it is now implemented in 110+ countries and territories around the world. The onset of number portability has greatly increased competition, particularly in the mobile industry, as it allows consumers to easily switch providers to take advantage of better deals, coverage or services.

While widely recognized as an important innovation, number portability has also created some pain points for Communication Service Providers (CSPs), Mobile Network Operators and other members of the telecom ecosystem, notably in the fight against communications fraud.

How Fraudsters Try to Capitalize on Number Portability 

The delivery of one-time passwords over SMS for account registration or two-factor authentication has become a common practice and, unfortunately, has created a new set of security vulnerabilities. A typical scenario happens when fraudsters exploit weak processes and port a phone number to receive the SMS or Text-To-Speech One-Time Passwords of the real owner and then use this information to take over their online accounts.

How NumeriCheck Addresses Communications Fraud 

In terms of fighting communications fraud, NumerCheck offers an extremely powerful solution for quashing scams through number validation. Underlying NumeriCheck’s robust anti-fraud capabilities is netnumber’s world-leading phone number intelligence data, which forms the basis of its market-leading real-time number data and routing solutions. With access to these robust data sets and NumeriCheck’s unique ability to validate phone numbers, customers can certify that their messages and voice calls will always reach the correct carrier and subscriber and that fraudulent patterns are identified.

To learn more about NumeriCheck, click here or contact us here.